The Growing Threat of Money Laundering

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The significant role financial services institutions can play in curbing money laundering activities The world economy is heavily affected by money that is illegally acquired and used for illegitimate purposes. Large sums of money are laundered every year, posing a threat to the global economy and its security. Financial services institutions such as banks, non-banking […]

The significant role financial services institutions can play in curbing money laundering activities

The world economy is heavily affected by money that is illegally acquired and used for illegitimate purposes. Large sums of money are laundered every year, posing a threat to the global economy and its security. Financial services institutions such as banks, non-banking financing companies, insurers and capital market firms are generally the most favored channel through which illicit money is laundered across the globe. Many financial services institutions may be associated with money launderers unknowingly, which is a primary reason that financial firms are subjected to stringent anti-money laundering (AML) regulations to track the trail of illegally-sourced earnings.

This paper provides a brief overview of the evolution of money laundering and common money laundering tactics around the world, and discusses the implications of money laundering activities on the global economy and financial services industry. The analysis also describes key anti-money laundering regulations and regulatory bodies, and shows how financial services firms can leverage technology to comply with increasing AML regulations and control the money laundering menace.

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